When I switch SoundAbout "Media Audio" to "USB Host", the sound goes out through my external DAC (even though 3.5mm headphone jack is occupied with previously mentioned splitter => earphones/mic) as desired, but the external mic no longer works as the internal mic is re-activated.

This is the last hurdle for being able to use voice prompts in a true "IN Dash Car" application of the Nexus 7 for me.